Correlation Between Baird Smallmid and Sp 500
Can any of the company-specific risk be diversified away by investing in both Baird Smallmid and Sp 500 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Baird Smallmid and Sp 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Smallmid Cap and Sp 500 Equal, you can compare the effects of market volatilities on Baird Smallmid and Sp 500 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Baird Smallmid with a short position of Sp 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Smallmid and Sp 500.
Diversification Opportunities for Baird Smallmid and Sp 500
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baird and INDEX is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Baird Smallmid Cap and Sp 500 Equal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp 500 Equal and Baird Smallmid is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Baird Smallmid Cap are associated (or correlated) with Sp 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp 500 Equal has no effect on the direction of Baird Smallmid i.e., Baird Smallmid and Sp 500 go up and down completely randomly.
Pair Corralation between Baird Smallmid and Sp 500
Assuming the 90 days horizon Baird Smallmid Cap is expected to under-perform the Sp 500. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baird Smallmid Cap is 1.03 times less risky than Sp 500. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Sp 500 Equal is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 5,787 in Sp 500 Equal on October 9, 2024 and sell it today you would lose (176.00) from holding Sp 500 Equal or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Smallmid Cap vs. Sp 500 Equal
Performance |
| Timeline |
| Baird Smallmid Cap |
| Sp 500 Equal |
Baird Smallmid and Sp 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Smallmid and Sp 500
The main advantage of trading using opposite Baird Smallmid and Sp 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Smallmid position performs unexpectedly, Sp 500 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sp 500 will offset losses from the drop in Sp 500's long position.| Baird Smallmid vs. Virtus Convertible | Baird Smallmid vs. Fidelity Vertible Securities | Baird Smallmid vs. Invesco Vertible Securities | Baird Smallmid vs. Advent Claymore Convertible |
| Sp 500 vs. Icon Financial Fund | Sp 500 vs. Financials Ultrasector Profund | Sp 500 vs. Blackstone Secured Lending | Sp 500 vs. Vanguard Financials Index |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |